The number of UK households in fuel poverty dropped from 5.5 million in 2009 to 4.75 million in 2010, new figures show.
The fall was mainly due to rising incomes, relatively stable energy prices at the time and reduced energy consumption, according to the 2012 Annual Report on Fuel Poverty released by the Department of Energy and Climate Change (Decc).
Northern Ireland remains the most fuel poor part of the UK, with estimates suggesting 44% of households spend more than 10% of incomes on energy bills.
In Scotland, 28% of the population are fuel poor, Wales is at 26% but England drops to 16%.
The rise in energy prices last year is expected to increase the number of households in fuel poverty again, although the figures will not be published until 2013 and 2014, Decc said.
Projections for England indicated there were likely to be around 3.5 million fuel-poor households in 2011 and 3.9 million in 2012.
Energy and climate change minister Greg Barker said: "I am encouraged by the fall in fuel poverty in the period to April 2011, but there is no room for complacency.
"Fuel poverty remains a serious national problem and the Coalition is absolutely committed to tackling it.
"People can still get help with heating and insulation through Warm Front and around two million households will get money off their energy bills this year through the Warm Home Discount scheme.
"However, our ambitious new policies including the Green Deal will go much further.
"The Green Deal will help people pay for home improvements through savings on their energy bills with extra financial help for the most vulnerable."
Consumer groups warned that recent price increases meant the figures were likely to underestimate the current problem.
Consumer Focus director of energy Audrey Gallacher said: "Today's figures show a dip in fuel poverty levels in 2010 reflecting lower energy prices.
"But as the average annual bill has risen by over £150 since then, many more people are now affected.
"It is a major concern that so many people are struggling to afford their energy bills.
"Millions of families, older people and disabled people, living on low incomes, will be facing tough daily decisions on what essentials they cut back on to make ends meet.
"Current Government plans are not sufficient to tackle the scale of this problem.
"This is clearly demonstrated by the more than 50% cut in energy efficiency help for the homes of the poorest households in England when fuel poverty levels are on the rise.
"Part of the reason why consumer bills are rising is to fund measures to make our energy supply cleaner and more secure.
"But our bills also include 'green taxes' which just go straight to the exchequer, not to improve the energy market or to make Britain more energy efficient.
"Some of this extra revenue could go a very long way to plug the funding gap in providing help to those who need it most."
National Energy Action (NEA) chief executive Jenny Saunders said: "Since this statistical analysis was undertaken we have entered a period of profound economic austerity accompanied by continuing increases in domestic gas and electricity prices.
"NEA estimates that additional gas and electricity price increases in 2011 mean that more than five million households in England now face unaffordable energy costs.
"Yet the Government response has been to effectively halve funding for schemes to improve heating and insulation standards in properties occupied by financially disadvantaged households, despite the fact that energy efficiency is the most rational long-term solution to fuel poverty.
"From next year, annual expenditure on these heating and insulation programmes will reduce from the 2010/2011 level of £1.1 billion to around £540 million.
"Clearly this action raises serious doubts about the Government's commitment to the eradication of fuel poverty in England by 2016, as required by the Warm Homes and Energy Conservation Act 2000.
"This lack of commitment is further evidenced by the withdrawal of all Treasury funding for energy efficiency programmes from next year in contrast to the Devolved Administrations of Scotland, Wales and Northern Ireland which will continue to support fuel-poor households through their own Government-funded programmes."
Friends of the Earth executive director Andy Atkins said: "Energy efficiency measures played a significant role in cutting the number of households in fuel poverty in 2010 so it's a disgrace that the current Government has slashed funds for better insulation and heating in low-income households.
"It's a national scandal that rising gas prices and heat-leaking homes have left millions shivering and thousands dying in the cold.
"Ministers must end the fuel poverty crisis with a major drive to fix poorly-insulated homes and shift to clean British energy from water, wind and the sun."